Chemical Regulation in China

Overview:

Asian economies have proven to offer cost-effective opportunities for the manufacture of chemical substances, none more so than China, making China of significant interest to multinational companies and to those that elect to source chemicals from abroad for import. Chemical regulation in China proceeds under two primary enabling Decrees/Orders -- the “Decree of the State Council -- People’s Republic of China -- Number 591 -- Regulations on Safe Management of Hazardous Chemicals in China” (Decree No. 591) and the “Order of the Ministry of Environmental Protection (MEP) -- People’s Republic of China -- Number 7 -- Environmental Management of New Chemical Substances in China” (MEP Order No. 7). Documents are officially published in Chinese and “official” English translations are not available. While unofficial translations are readily available, the official document published in Chinese prevails in cases of discrepancies. There are significant variations in the written and verbal Chinese language, making it important to understand the intent behind Orders, Decrees, and guidance being offered.

Multinational corporations accustomed to Western regulatory systems typically anticipate a highly detailed written regulatory framework characterized by rigid rules, with compliance driven by the issuance, or threat, of penalties, public disgrace, and reputational damage. In China, however, the framework is very different, as is the conduct of business within the Asian framework. Regulations typically offer only an outline of the details to be followed, which allows for much more flexibility than is typical under Western systems. The regulation may be comprised of both what is written and unwritten, with the intent that its flexibility will allow for it to be interpreted and re-interpreted as circumstances indicate. For instance, Decree No. 591 is viewed as a foundational regulation on which other regulations are based for the full implementation of managing hazardous chemicals in China. Regulators have considerable leeway in addressing issues that may arise while trying to remain consistent and within the scope of the regulation.

One must also remember that in the global system of chemical management, China has made and continues to make extensive progress quickly. China’s chemical management programs are still relatively new and its regulators are continuing to gain experience. Foundation regulations such as Decree No. 591 require interaction with multiple agencies, all offering a different perspective and employing different means to accomplish the end goal. As a result, there is more often than not a significant time period until a regulation becomes fully operational with the foundation and its many moving parts operating smoothly. Assistance is often needed to determine how to navigate such complex matters.

The Acta Group (Acta®) is active and knowledgeable in assisting its clients in dealing with the complexities of chemical management regulations in China. We are most active in New Chemical Substance Notification (NCSN) MEP Order No. 7 supports as well as Hazardous Chemicals Management (Decree No. 591), and troubleshooting complex issues that require significant insights and experience in navigating Chinese regulations.

Our Experience:

Since MEP Order No. 7’s inception, and with each subsequent Chinese Decree, Acta staff has actively assessed the legislation and the myriad of related guidance documents to guide our clients through the complex web of regulation.

Brian Xu, M.D., Ph.D., DABT® is a board-certified toxicologist with an M.D. in pathology from Lanzhou Medical College, Lanzhou, China , a Ph.D. in pharmacology and toxicology from George Washington University, Washington, D.C., and a Post-Doctoral fellowship in Pharmocolgy at Yale University, New Haven, Connecticut. Dr. Xu offer clients over 15 years of experience developing and managing international safety testing, risk assessment, product safety, and regulatory compliance for consumer products, pharmaceuticals, cosmetics, industrial and specialty chemicals, agrochemicals, and antimicrobials. Fluent in English and Mandarin, Dr. Xu works with clients to place, manage, and monitor toxicological and clinical tests and ensures Good Laboratory Practices (GLP) at laboratories in the U.S. and China; supports Globally Harmonized System of Classification and Labeling of Chemicals (GHS) classification and implementation; and oversees the preparation of dossiers in English or Chinese.

In addition to Dr. Xu, Acta's impressive scientific and toxicological team includes Jane Vergnes, Ph.D., DABT®, and Lara Hall, MS, RQAP-GLP. Dr. Vergnes, an esteemed toxicologist with a Ph.D. in Human Genetics and an impressive track record of success directing global product stewardship for Fortune 500-listed chemical companies, before joining Acta, started her career as a research scientist and laboratory supervisor. Dr. Vergnes has particular expertise in toxicological testing among various regulatory schemes, including study design, laboratory practices, and data requirements for new chemical introductions. Ms. Hall, a Registered Quality Assurance Professional in Good Laboratory Practices (RQAP-GLP), earned both a B.S. and M.S. in Biology and has over a decade of experience in environmental research, study monitoring, and international regulatory support. Ms. Hall assists clients in placing and monitoring studies to assist with new chemicals; developing testing plans for chemicals seeking regulatory approval; and assessing studies for conformance with testing guidelines, data compensation, and regulatory and GLP requirements.

Acta’s resources in China include the extensive experience of team leaders Yang Ni and Mingchun Ren in Beijing, with additional staff in Shanghai, Nanjing, and Xi’an, and Andy Burgess in the U.K. Our team has been active in performing registrations at all levels, and offering laboratory selection assistance and project management while providing sound scientific and business advice to our clients on the complexities and nuances of Decree No. 591, MEP Order No. 7, and other guidance documents.

NCSN in China -- MEP Order No. 7

MEP Order No. 7 addresses notification (registration) and management of new chemical substances. MEP Order No. 7 entered into force on October 15, 2010. Supporting documents, including guidance documents and submission forms, were issued by the MEP shortly thereafter and continue to evolve.

MEP Order No. 7 is broad in scope. Many companies that have substances not previously subject to new chemical notification regulations find themselves needing to address the requirements of MEP Order No. 7, since MEP Order No. 7 covers raw materials and intermediates being used for other purposes such as pharmaceuticals, pesticides, and plant protection products. We understand that each company’s business model is unique, and our experts can help chart a path forward, ensuring a successful, cost efficient, and timely registration.

We have established relationships with approved Chinese laboratories for those studies required to be conducted in China under MEP Order No. 7. It is very important for clients to understand that with a limited number of approved laboratories, and high demand for their services, Acta’s well-established relationships and familiarity with each of the approved laboratories is an important and critical aspect to ensure that projects remain on track to meet commercialization timelines.

Delays and difficulties tend to occur, as with most regulatory programs, when a prospective registrant submits novel chemistries that require alternative means for assessment, for example, instances that involve testing difficulties, data waivers, or the use of such non-testing methods such as read-across or quantitative structure activity relationships (QSAR) to satisfy information requirements.

Acta has a high success rate in working with its clients to ensure a successful, cost efficient, and timely registration due to our extensive experience in performing chemical notifications under MEP Order No. 7 and the leadership of former government regulators on our Acta team.

Decree No. 591, entered into force on December 1, 2011, replaced the previous Regulation, which was in place since 2002. Decree No. 591 is the highest chemical control law in China and it regulates chemicals through the entire supply chain, from manufacture, importation, distribution, and storage to transportation and use. Decree No. 591 is supported by dozens of ministerial regulations (including MEP Order No. 7) and numerous guidance documents.

Decree No. 591 requires businesses that handle hazardous chemicals in China to apply for licenses to operate hazardous chemicals and submit registrations separately to two ministries, the State Administration of Work Safety (SAWS) and MEP. Decree No. 591 also implements GHS in China, requiring companies to provide Safety Data Sheets (SDS) and labels prepared in accordance with relevant national standards. The specific hazardous chemical management legislations include:

SAWS Order No. 53 (registration);

SAWS Order No. 41 (manufacture);

SAWS Order No. 55 (sale and storage); and

SAWS Order No. 57 (safe use).

In contrast to chemical management programs in many other countries, hazardous chemicals management in China is addressed under separate Orders. Whereas MEP Order No. 7 focuses on new chemical substances, SAWS Order No. 53 focuses on hazardous chemicals as designated by the published Catalog of Hazardous Chemicals (2015) (commonly referred to as The Catalog). There are more than 2,800 substances in The Catalog.

The definition of hazardous chemicals is based on China’s adoption of the United Nations’ GHS. The Catalog is organized into “lists” based on their characteristics.

SAWS Order No. 53 -- Measures for the Administration of Registration of Hazardous Chemicals

Decree No. 591 requires domestic manufacturers and importers of hazardous chemicals to register hazardous chemicals with the National Registration Center of Chemicals (NRCC) of SAWS prior to manufacturing or importation. Detailed registration requirements and procedures are outlined in SAWS Order No. 53 that entered into force on August 1, 2012.

SAWS Order No. 53 requires registration of chemical products that include both substances and mixtures, and there is no small volume exemption. The validity of a registration certificate is three years and has to be renewed three months prior to the certificate’s expiration. The registration requires phyiso-chemical properties, main uses, hazard properties, classification and labeling, safety requirements for storage, use, and transport, Chinese SDSs and labels, as well as a 24h emergency contact number.

A product is subject to registration if it is listed in The Catalog or if it is classified as hazardous according to GHS (excluding certain hazard categories such as acute toxicity 5).

What We Do:

Acta’s extensive involvement in NCSN, and the manufacture, import, and export of chemicals in China, makes us especially well-suited to address client issues that arise under MEP Order No. 7, Decree No. 591, and SAWS Order No. 53. Areas in which we advise clients include the following:

Worked with a multinational company undergoing a sale transaction to transfer successfully its existing and pending registrations to the new owner. This was achieved by working with SCC-MEP to offer a path forward that was not prescriptively addressed in existing guidance documents.

Assisted a multinational client in selecting a quality laboratory that was able to meet the designated timelines, which required extensive engagement with the laboratory.

Established a global test plan and registration strategy for a multinational client that included submission under MEP Order No. 7.

Consulted with SAWS to resolve complex issues with a multinational company.

Conducted comprehensive multi-facility audit of Chinese business in China.